I went for the Dacia Duster in the end... I received an email just now from booking.com to say that VAT has risen to 11% from 7% on Hotels effective the 1st of this month just incase anyone wanted to know. Iceland has announced that it will lower its standard VAT rate from 25.5% to 24% on 1 January 2015. The reduced VAT rate will be increased from 7% to 11%. The reduced rate applies to hotel accommodation, broadcast services, newspapers, recorded music and basic foodstuffs. A number of previously exempt or zero rated supplies will now be subject to the reduced VAT rate, including certain types of transport.